Fairfield Commerce Center, One of City’s Last Developable Parcels, Continues Construction as Industrial Demand Grows

Phelan Development, Fairfield Commerce Center, Fairfield, JLL, Ball Metal
Courtesy of Phelan Development

By Meghan Hall

Available land for industrial development has become hard to find in recent years as the Bay Area’s explosive growth continues. In Fairfield, one of the last remaining developable industrial parcels, is now in the thick of construction. Newport Beach, Calif.-based Phelan Development Company hopes to deliver the three-building Fairfield Commerce Center by August of 2021 and is doing so amidst high levels of demand for well-located industrial product.

“This was an opportunity to build in an established park that has really great access via the I-80 Freeway, and it is adjacent to Travis Airforce Base, which is a very active place,” explained Dave Haugen, regional partner with Phelan Development. “…In Fairfield it is increasingly difficult to find land to develop, and we’re the only project under construction right now. We have an advantage of being able to offer space that can be delivered this summer.”

Upon completion the Fairfield Commerce Center will total 496,541 square feet. The square footage will be spread across three buildings. Building 1—the smallest—will total 69,521 square feet, while Building 2 will house 175,404 square feet. Building 3 will have 251,616 square feet and was entirely pre-leased to Ball Metal, a manufacturer of aluminum cans and other goods, prior to the start of construction.

Each building will contain 2,990 square feet and 3,550 square feet of office space as well as other features like skylights, intake louvers and a number of dock and grade doors. Buildings 2 and 3 will have 40-foot clear heights—almost unheard of in industrial construction, particularly in mostly speculative builds.

“That is really unusual. And along with that comes a eight-inch thick floor,” said Haugen. “It’s a highly functional building.”

Matt Bracco, a JLL Managing Director part of the leasing team echoed the importance of the building’s design in attracting tenants: “I think the 40-foot clear height is one of the factors that really separates this project from the others.”

According to the project team, there is a good chance that at least one of the remaining buildings will be leased prior to construction being completed later this year. A number of companies have been interested in leasing the remaining space, including e-commerce firms and more food and beverage companies.

“There continues to be a tremendous amount of activity in the North Bay, and Fairfield is part of the North Bay submarket,” Bracco said. “…There are some really good drivers there in terms of strong tenant demand [and] low vacancy.”

JLL is currently tracking more than 4 million square feet of industrial requirements in the North Bay, which includes the city of Fairfield. In Solano County, industrial vacancy sits at 5.3 percent, and the City of Fairfield has plenty of labor and water, two additional factors that can prove to be key to the success of industrial tenants. Within the immediate vicinity, there are an estimated 22,700 manufacturing employees and 29,600 warehouse employees—meaning there is plenty of labor to staff growing companies.

Part of the reason that interest in the development has remained high not only has to do with stable industrial fundamentals, but because the project is going up on one of the last available parcels for industrial development in Fairfield.

“There is so little Class A industrial product in the market right now, and companies are having to look further and further out, away from the core bay area to find that space,” stated Bracco. “So, us being able to deliver a product in Fairfield is huge because it allows us to capture a lot of pent up demand that’s locally grown.”

Given the demand for industrial space and general lack of supply within the Bay Area, Phelan Development is using its experience to pursue a number of other industrial projects across the region. In September of last year, the company kicked off a second round of construction on its Phelan Gateway, a 3.20 million square foot master planned development. The entire project will be completed by 2023. In recent months, Phelan Development also leased 925,000 square feet at its North Tracy Commerce Center to Michaels, and has recently completed the tilting and roof on its Lathrop Gateway project, a 381,000 square foot building. Over in Stockton, the company has another four buildings—totaling 700,000 square feet—in the pipeline.

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